Stockopedia comments Paul Scott - HTG29 Aug 2024 13:38
Paul’s opinion - I think there’s lots to like here, having spent most of the morning going through it all. The IMC webinar today was really informative, so I urge you to look at the recording once it’s up (probably tomorrow). It was only 30 minutes, but gave an excellent overview of the group, and its performance, and some Q&A too. I took notes, and always write a conclusion about my view of mgt, and what to do with my holding. In this case I’ve noted down: CEO & CFO both good, and buy more! Obviously as always just my personal view, not a recommendation, as we do our own research here, and take responsibility for our own portfolios.
I cannot see why the market is only giving this decent quality business, making improving margins, with a bulletproof almost debt-free balance sheet, a 2025 PER of only 8.8x? It just seems the wrong price. Maybe there are worries about sustainability of higher profits, or dollar strength, and the cyclical nature of the oil/gas markets which produce over 90% of Hunting’s revenues? For me that is offset by the specialist & innovative nature of HTG’s products, eg N.Sea contracts announced today are really interesting, where HTG has spent several years developing a specialist method of extending the life of oil wells, and efficiently extracting the remaining resources from older oil wells. HTG has over 500 patents protecting its tech, hence the decent & improving margins. That sounds lucrative. It’s now started winning some decent sized contracts oil recovery, eg $60m over 5 years announced separately today. That could have obvious growth potential. Similar things were said about other divisions, where HTG also has proprietary, and high margin products & services.
This looks very good I think, and cheap, so it’s a shiny bright GREEN from me. Bear in mind I hold personally, and want to buy more when funds are available, so I am clearly biased. Or to put it more accurately, I think it’s really good, so have backed my view with my own money.
Stockopedia likes it too, so it gets approval from man & machine. Nice looking chart too.
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As the CEO pointed out today, last time revenue & profit was at the 2025 expected level, the share price was double the current level. There hasn't been any dilution either. All of which reinforces my view that this share maybe has medium term potential to recover further to possibly 600-800p in due course? Who knows though, anything can happen with shares, as you know!
https://app.stockopedia.com/content/small-cap-value-report-thu-29-aug-2024-placeholder-1006459?order=createdAt&sort=desc&mode=threaded
SUBSCRIPTION ONLY hence printout